FCC upholds super tax, partially strikes down high court rulings
Pakistan
Court also rejected petitions filed in 2022 against the super tax
ISLAMABAD (Dunya News) – The Federal Constitutional Court (FCC), while announcing its verdict in the super tax case, has partially set aside the high courts’ decisions related to Section 4C of the Income Tax Ordinance and upheld the super tax.
Chief Justice of the Federal Constitutional Court, Aminuddin Khan, delivered a short verdict in the super tax case. The case was heard by a three-member bench comprising Chief Justice Khan, Justice Hassan Rizvi, and Justice Arshad Hussain Shah.
The court ruled that objections regarding the maintainability of the case were rejected, Section 4B of the Income Tax Ordinance 2015 would remain in force, and the high courts’ rulings concerning Section 4C were partially declared null and void.
The FCC dismissed petitions filed in 2015 challenging the super tax and held that Parliament has the authority to impose tax on income.
The court also rejected petitions filed in 2022 against the super tax, ruling that if any individual in the oil and gas sector is entitled to relief, they should approach the relevant forum. It further decided that super tax would not apply to Modarabas, mutual funds, and benevolent funds.
According to the court’s decision, separate legal exemptions for various sectors will continue to remain in place.
Earlier, the court had reserved its verdict after completing the hearing in the super tax case. During the proceedings, counsel for various companies, Makhdoom Ali Khan, concluded his rebuttal arguments.
Chief Justice Khan had remarked that efforts would be made to announce the short verdict the same day, otherwise it would be issued the following day.
It is noteworthy that this decision will benefit the federal government by more than Rs300 billion. Following the ruling, legal ambiguity surrounding the super tax has ended, and the government’s position has gained constitutional validation.
